You may have seen ‘no DSS’ in the description of some rental properties before, but what does it mean? This means that the landlord is not willing to rent to tenants who receive benefits, particularly housing benefits. But is avoiding tenants on benefits a smart thing to do? Is it even legal? I will look into the topic in detail, including the current legislation surrounding tenants on housing benefits and what to expect in the future of rental laws.
DSS stands for the Department of Social Security and is used as a blanket term to refer to people who receive benefits from the government. The Department of Social Security has not existed since 2001 but the acronym is still commonly used, particularly by landlords. People may receive housing benefits due to financial difficulties – they may not be employed or only employed part-time, they may have a disability, or have young children or other dependents to take care of. Many people who received housing benefits will likely now receive a monthly Universal Credit payment.
The acronym ‘DSS’ is outdated now, as the Department of Social Security is now known as the Department of Work and Pensions. DSS and housing benefits mean basically the same thing – money paid out to people by the government to assist with their living costs.
The housing element of Universal Credit, or housing benefit, is calculated using the Local Housing Allowance (LHA). This takes into account the local market rates and the size of the rental property in question. The LHA rates are determined by the Valuation Office Agency or VOA. Rent support levels are set so that 30% of the properties in a specific area are at or below the given amount.
Many landlords are unwilling to rent their properties to people who receive housing benefits, posting ‘no DSS’ in the advertisements for their properties. This is due to fears that the tenants will end up in rent arrears or will be otherwise irresponsible tenants. At the time of writing (September 2024), there are no mortgages available that demand tenants of a property are not in receipt of benefits, so it is the choice of the landlord to allow (or not) people who receive benefits as tenants.
There is currently no UK law that states it is illegal to refuse to rent to tenants who receive benefits, however, there has been a recent court case (personal details redacted) where a tenant has successfully claimed discrimination by a landlord. It’s common for people with disabilities to receive benefits, and it is illegal to refuse to rent to them on this basis. the Discrimination Act 2010 has made it illegal to discriminate against someone due to a disability or other protected characteristics. Another similar case ruled in a tenant’s favour after a lettings agent refused to let a property to a disabled woman and her children, and as a result, they became homeless. Landlords who hope to evict tenants due to them claiming benefits, or even refusing a viewing to potential tenants on benefits, may find themselves in deep water based on legal precedent.
The answer to this question depends on the local authority that is responsible for paying out housing benefits, but usually, housing benefits will be paid directly to the tenant. People who receive Universal Credit will receive one lump sum per month to assist with all living costs, not just housing costs. In this case, it is unlikely the landlord can receive a direct payment of housing benefit. If a landlord is registered as a social landlord and lets property through a housing association or trust, they could also be eligible to receive direct payments of housing benefit.
It could also be possible to request that housing benefits be paid directly to the landlord if the tenant has missed two or more months of rent payments, the tenant has an intellectual disability, the tenant has very poor credit or has previously been declared bankrupt, or other extenuating circumstances – content the local housing authority for guidance on this.
Renting properties to tenants who receive housing benefits is a good way of avoiding any vacancies in your properties. It’s also worth remembering that any tenant’s circumstances can change, resulting in them receiving benefits. Landlords who are looking for more peace of mind when renting to tenants who claim benefits could follow these tips:
Following the above suggestions can ensure that you can rent to tenants who receive benefits without any more issues than tenants who earn enough to pay their rent from their jobs. Remember, any tenant can get into rent arrears by simply not making the payments, so don’t assume that because someone has a full-time job, they will be a model tenant! For more advice on renting to people on benefits, contact your local housing authority to find out the LHA for the area and more.
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The upcoming Renters’ Rights Bill as well as previous court cases will likely spell out the end of ‘no DSS’ for landlords. The proposed bill aims to end rental discrimination against those who receive benefits and people with children. The Renters’ Rights Bill has not been passed yet, it is currently in its 2nd reading in the House of Commons, and must yet pass through the House of Lords and receive Royal Assent before it becomes part of UK law, during which time it is subject to change.